The Chinese finance hub in June rolled out new rules that will eventually require all crypto exchanges in the city to acquire licenses and be subject to investor protection guardrails.
Police confirmed to AFP that its Commercial Crime Bureau was looking into whether criminal acts were involved, following a referral from the Securities and Futures Commission (SFC).
The SFC warned a day earlier that JPEX was advertising itself as a "licensed and recognised platform", but had neither applied for nor received a license in the city.
The exchange also displayed "suspicious features" such as boasting very high returns on its products, and offering crypto deposit and earning services which were not allowed under the new rules, the regulator added in a statement.
JPEX criticised the allegations as "unfair suppression" and said the regulator was "exerting undue pressure".
On Thursday, the platform said it had "adjusted its withdrawal fee" for USDT, a stablecoin whose value is meant to be pegged to the US dollar, in light of statements made by the SFC.
An AFP reporter found on Thursday evening that the platform capped each withdrawal at 1000 USDT and charged a withdrawal fee of 980 USDT.
"Based on the response of the Securities and Futures Commission, the platform will gradually adjust the withdrawal fees in the coming days and will phase in higher withdrawal limits," JPEX said in a statement.
In a press release dated February, JPEX said it had "$2 billion in global assets and technology under its management" and had spent more than $5 million on promoting its services in Hong Kong.
At least two high-profile crypto influencers in Hong Kong said on Thursday they have cut ties with the exchange.
AFP has contacted JPEX for further comment.
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